Despite these flaws, the P/E ratio remains a popular valuation metric. The investors that rely on P/Es expose themselves to the risk of buying "value traps" or stocks that look cheap but are actually expensive.
To help avoid these traps, we're highlighting three stocks that appear cheap and getting cheaper based on declining P/Es. After reversing accounting distortions and analyzing the future cash flows embedded in their valuations, we see that these stocks are actually expensive and getting more expensive. Landec Corporation (LNDC), Brooks Automation (BRKS), and Host Hotels &